Another week, another SEC update. This time, the regulator has confirmed that it will take a deep look at executive compensation disclosure requirements, starting with a roundtable later this month.
The SEC, never one to let a disclosure rule gather dust, has decided it’s time to revisit the question of how – and how much – companies tell us about what they pay the people in charge.
On June 26, the agency will gather an assortment of company reps, compensation advisers, lawyers and investors at its Washington HQ for a roundtable chat on executive pay and the disclosure rules that go along with it. You can register to attend in person, or tune in via webcast on the SEC’s site, where a recording will also be posted for anyone keen to catch up later. The lineup and agenda were revealed on June 11.
The current regime for executive pay disclosures was first tabled in 1992, aiming to help investors understand how compensation lines up with corporate performance. It’s had a few facelifts since then, most notably in 2006 and again under the Dodd-Frank Act, which introduced more granular reporting requirements including the now-familiar pay-versus-performance breakdown.
Now, the SEC wants to know if all that detail is still delivering value for money. Are the current disclosures giving investors what they need – or just giving companies a compliance headache?
To frame the discussion, the Commission has posed nine big questions, loosely grouped around three themes. First, how are executive pay packages actually put together and could disclosures do a better job of walking investors through that process? Second, have two decades of regulatory tweaks made the rules more informative, or just more costly and confusing? Third, what should be done about disclosures on perks, clawbacks and the pay-for-performance metrics that often make headlines and stir debate in the boardroom?
Public comments are welcome and can be submitted online. We’ll be keeping a close eye on the roundtable and will report back with the highlights and crucial learnings for reporters.
What do you make of the fact that this topic is back in the SEC’s sights? Let us know at [email protected].
Laurie Havelock
Laurie has been with IR Impact for over a decade, becoming editor in 2023 after roles as a reporter and research editor. He moderates events and serves as MC for global awards. Previously, he was acting business editor at the i newspaper and deputy...
